Market Wrap: Europe slips on Ormuz escalation, market awaits US CPI

European market sentiment ahead of the US cash equity open remains moderately negative. Declines are fairly broad-based but shallow. The drop is mainly a consequence of renewed escalation in the Strait of Hormuz. Investors are intuitively pricing in greater inflation pressure and a more restrictive monetary policy stance in the EU.

The biggest laggards are the UK and Spain. FTSE 100 and IBEX futures are down about 0.4–0.5%.

The best relative performance is seen in the broad European index and in the Netherlands, where losses are limited to close to 0%. 

Company news, Europe:

• European airlines: Airline operators are among the first victims of renewed fighting in the Persian Gulf. High jet fuel prices and closed air corridors are having an immediate and material impact on sector profitability.
• Hapag-Lloyd (HLAG.DE): The German carrier published its Q2 2026 results. Profitability fell sharply, with EPS already at a loss of EUR -1.26. Revenues surprised to the upside, rising to EUR 4.2 billion. The stock is up more than 6%, driven less by the results and more by guidance; management committed to full-year results well above the market’s previous expectations.
• Evotec (EVO.DE) : Valuations of the German pharmaceutical company are plunging by around 25%. The company reported a revenue decline in Q2 2026 and significantly lowered its full-year forecasts.
• Kongsberg (KOG.NO): Kongsberg Maritime, part of Kongsberg Gruppen, published its Q2 2026 results. The market was disappointed; despite a record order backlog and assurances of strong prospects, investors are focused on margin pressure and a limited ability to convert orders into revenue.
• AstraZeneca (AZN.UK): The UK pharmaceutical group bought an exclusive license for a lung cancer drug from the Chinese company Dizal. The upfront cost is USD 600 million, with the possibility of an additional USD 900 million tied to research and sales milestones.

Commodities:

• Another day of strong gains is visible in crude oil. This reflects not only the renewed outbreak of fighting in the Strait of Hormuz, but also increasingly heavy bombardments of refineries in Russia, further reducing supply in the market. Brent has already broken above USD 87.

FX:

• In FX, the highest volatility is in NZD and AUD; the currencies are strengthening by about 1% and 0.5% against the USD. The Antipodean currencies are gaining on much better-than-forecast China trade data and rising expectations of an RBA rate hike, while the USD is easing slightly ahead of the US inflation release. NZD is rising even more after hawkish comments from RBNZ Chief Economist Paul Conway, which increased conviction that persistent inflation may require further monetary tightening.

Macro:

• Today’s US inflation release is in focus. The market expects no change in core inflation (2.9%) and a decline in headline inflation to 3.8% year over year. A meaningful surprise could trigger sharp moves in equity indices.